Poll Position

Poll Position

Learning history is easy; learning its lessons is almost impossible. Or is it? The property market is set to enter its seventh consecutive bull run with Summer fast approaching, and yet again its timing is perfect. Amid economic gloom, threats of war, and a weakening global sharemarket, the property market is occupying poll position for all the right reasons. Interest rates will remain stagnant, with a slight hint of reductions as the US rates look set to fall. For the moment, property has proved itself to be the ‘safe bet’, as the business community faces massive reform with a new push for greater corporate accountability. This will no doubt see the Toms, Dicks and Harriets, adopt a more conservative approach to the stockmarket.

Already we are starting to see the one-time sharemarket investors, venturing back into commercial and retail property, which will leave just the big institutions in shares. This was further evidenced with this week’s auctions, which clearly demonstrated that commercial property is well and truly back in the spotlight. All the properties sold above reserve and there was standing room only in the commercial auction rooms. The little guys today have a much greater faith in property. We are coming up to the ten-year anniversary of the mortgagee sales in Mosman, and to the best of my knowledge I have seen just one of these sales in recent times. Maybe the cruel lessons of the early nineties have taught many a lesson, and today it is clearly evident that the property market is not on borrowed time, nor are the foundations rubbery as some scribes have suggested. Records are being achieved that attest to this theory, as against News Corporation posting the biggest loss in Australian corporate history. Investors see property as a ‘safe house’ and by all accounts that will remain the case until such time as the corporate world can prove to all, that they don’t have any more skeletons in their closets.

We are all aware that there is no such thing as a sure bet, however once again as was the case after the events of September 11, the expats are out-registering the locals on our database. We do live in the lucky country, and more importantly the turmoil overseas just confirms why so many see Australia offering a great alternative lifestyle. Whilst Winter traded on the conservative side in terms of volume of property, we could not be happier with the number of properties that we are about to release to the marketplace. In terms of volume, it is the greatest number of homes that we have offered to the Spring market in recent times. We also believe that the top-end of the market will hit dizzy new heights, and this in turn will drive up the other price categories. As one client said this week, “when was the last time you saw somebody lose money on their principal place of residence, given the present market conditions of low interest rates?”

Whilst it is acknowledged that rental vacancy rates are at an all time high, it is seasonal with winter, and in all probability with summer fast approaching, this figure will be absorbed and reduced back to more respectable levels. What remains to be seen is whether or not my predictions will come to fruition. All we can ask is that the market gets off to a good start, and for that to eventuate we require an even balance of property at all price levels.

Like all aspects of the property industry, very little goes by without some comment revealing the intrigues of observation. I love all the speculation about the international celebrities who are supposedly house-hunting in Sydney. If such scuttlebutt proves to be correct I can’t wait to see how they all attain their respective FIRB approvals (approvals for non residents), but there again, it is common knowledge that next year’s Oscars will be held in Sydney. Much depends on which Sunday newspaper you read. If people read it, some property journalists will write it. As for the property crash, only time will tell. I know where my money is on this one… cheers, clink… ^__^.

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